U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 17530 / May 22, 2002
SECURITIES AND EXCHANGE COMMISSION v. AMERICAN HEALTHCARE PROVIDERS, INC., ARTHUR W. WHEELER, LARS M. KRAM, ANGEL L. LORIE JR., LUIS F. LORIE, AND MICHAEL ANTHONY LESTER 01 Civ 7649 (B.S.J) (S.D.N.Y) (May 14, 2002)
Officer and Director Bars and Antifraud Injunctions Entered Against Michael A. Lester and Lars M. Kram
The Securities and Exchange Commission announced that on May 14, 2002, Judge Barbara S. Jones entered final judgments against defendants Michael Anthony Lester ("Lester") and Lars M. Kram ("Kram"), barring them from serving as an officer or director of a public company. The judgment also contains permanent injunctions against Lester and Kram, enjoining them from further violations of Sections 17(a) and of the Securities Act of 1933 ("Securities Act") and Section 10(b) Exchange Act and Rule 10b-5 thereunder. In addition, the judgment permanently enjoins Lester from further violations of Section 17(b) of the Exchange Act. The Court further ordered Kram to disgorge $73,659.98 plus $10,708.75 in prejudgment interest, but waived payment based on his demonstrated inability to pay. Finally, the Court did not impose civil monetary penalties based on Lester's and Kram's demonstrated inabilities to pay. Defendants Kram and Lester consented to the entry of the judgments, without admitting or denying the allegations in the Commission's Complaint.
The complaint, filed on August 16, 2001, charged American Healthcare Providers, Inc. and five individuals for their roles in an Internet market manipulation scheme. The Commission's complaint alleges that American Healthcare was a start-up company with "headquarters" in the New York City apartment of one of the defendants, and had virtually no business operations. The Commission charges that after pumping up the price of American Healthcare stock through an extensive campaign of false press releases and Internet message board postings, certain of the defendants dumped their holdings of the stock on the unsuspecting public, reaping at least $1.47 million in illicit gains.
The Commission continues to prosecute the litigation against the remaining defendants.
For tips on how to avoid Internet "pump-and-dump" stock manipulation schemes,
See also: L.R. 17104 (August 16, 2001)